Pluto helps Woodside double profits

A STRONG initial contribution from its Pluto development and the sell-down of equity in Browse Basin helped Woodside Petroleum double profits for 2012, but a decision on the controversial Browse Basin development is now not due until the June quarter.

Workers at Woodside's Pluto liquified development. Pluto's completion will underpin a further lift in production volumes this year. Photo: Reuters

Delays in finalising the $US14.9 billion Pluto project weighed on the performance but its completion will underpin a further lift in production volumes this year.

Earnings per share rose to $US3.66 from $US1.90, with the final dividend raised by US10¢ to a fully-franked US65¢, giving an annual payout of $US1.30, up from $US1.10.

Earnings were flattered by the $US974 million gain on the partial sale of equity in Browse Basin for a gross amount of $US2 billion, which helped reduce debt.

It comes as the group is faced with a rise in spending in 2013, both on development projects and exploration.

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Capital spending for 2013 is budgeted at $US2.58 billion, up from $US1.8 billion in 2012, boosted by spending on the Leviathan development and on a project in Burma. This excludes any outlays on Browse, with an update due by mid-year, Woodside said.

Exploration spending in 2013 is to rise to $US478 million, well up on $US260 million in 2012, with eight offshore wells planned in Australia alone.

During 2012, the average realised LNG price for exports from the North-West Shelf project was $US77.85 per barrel of oil equivalent, up by more than $US10.

Woodside said long-term prices continue to be indexed to 85-90 per cent of oil price movements, despite pressure to break the link between the oil price and export liquefied gas prices. By the end of 2014 about 85 per cent of Woodside's long-term contracted LNG portfolio will have been subject to price reviews in the preceding three years, it said.

The gas market remained tight, it said, with the prospect of delays in completing some of the planned projects to buoy prices and, with uncommitted gas available from 2014, Woodside was well positioned.

Despite speculation of the adverse impact of US liquefied natural gas exports on the gas trade, Woodside said the US was likely to account for about 10 per cent of global trade, compared to 25 per cent by Australia and 20 per cent by Qatar.